News and commentary about road pricing across the globe. Tolls, congestion charging, distance based charging, road user charging. Public policy, economics, technology and more. If Google brought you here, look down the right sidebar for references.

Tuesday, 6 October 2015

Often ignored in Europe and elsewhere, is the admirable progress made in the state of Oregon towards rolling out road user charging (called "road usage charging" to add to the lexicon of road pricing). Oregon is, now, charging (some) cars, for using all of the roads across the state, by distance. Only New Zealand, with the application of its weight and distance based Road User Charge has a parallel (as all diesel powered vehicles, including cars, prepay blocks of distance to use public roads there). However, unlike New Zealand, which is a charge focused on heavy vehicles, which also captures light ones (because of the absence of diesel tax), Oregon is focused on light vehicles that have very high levels of fuel efficiency (including no consumption of fossil fuels). It has its eyes very much on the future, as it sees this as replacing fuel tax.

The Mileage Based User Fee Alliance (MBUFA - yes "mileage based user fee" adds to the lexicon, unfortunately) has released its latest newsletter, which handily outlines what it calls the "myths" of the Oregon scheme.

Those on the mailing list for MBUFA got this, but it is unfortunately not accessible on MBUFA's website. So I have replicated it below, in full (emphasis added where relevant). Apologies for the US English, commentary follows.

BUSTING MYTHS ABOUT OREGON'S ROAD USAGE CHARGE PROGRAM

The Oregon Department of Transportation is first in the nation to create a per-mile charging system (thanks to Oregon's 2013 Senate Bill 810) that will help fill the widening gap in transportation funding anticipated with declining fuel taxes and rising construction costs. The Road Usage Charge Program will assess a charge of 1.5 cents per mile for up to 5,000 cars and light commercial vehicles and issue a gas tax credit to those who volunteer to participate.

Opinions on this funding model vary, from generally positive to vehemently opposed. And there are many misperceptions about what the program will do. Reactions like these were considered carefully by ODOT and the Oregon Legislature before deciding to implement the program. Next time you come up against a myth about Oregon's Road Usage Charge Program, consider the following.

Myth: It's a new tax, on top of everything else the government charges.

Fact: The road charge works as a replacement for the gas tax, not an additional tax.

Participants in the Road Usage Charge Program will receive a credit of gas tax paid while they are in the program. The system will calculate gas consumed and gas tax paid as it also calculates the per-mile charge. If the two are equal, the motorist pays nothing. If the gas tax paid exceeds road charges billed, the driver will be eligible for a refund. And if the road charge exceeds what was paid in gas tax, the balance will be due from the motorist.

As it stands, the gas tax is becoming obsolete as vehicles consume less fuel. Over time, older vehicles will phase out and the entire fleet of vehicles will become highly fuel efficient, vaporizing the gas tax. Oregon's Road Usage Charge Program is a fair and sustainable funding model that will ensure our roads are maintained safely for every motorist well into the future.

Myth: State government will now track your whereabouts with GPS.

Fact: GPS is not required to participate in the program.

Senate Bill 810, which created the Road Usage Charge Program, does not require GPS. In fact, it demands that at least one mileage reporting option not use GPS, and that motorists be given choices for the devices and reporting services they will use.

With the advent of the smartphone in 2007, many consumers have become more comfortable with GPS technology because it gives them immediate information and services at their fingertips. They may like the convenience that a GPS-enabled device offers for road usage charging-no need to switch "on" or "off" when traveling out of state or on private roads; miles are automatically recognized as billable or not. Other folks are not as comfortable, and they will exercise their choice to not use location-determination technology. Whatever their choice, having options empowers participants to select the plan that best fits their lifestyle and driving habits.

Myth: It is a disincentive to owners of fuel-efficient vehicles.

Fact: These drivers favor the fairness of road use charging.

In ODOT's focus group research (2012-13), electric vehicle owners tended to be in favor of road use charging. They appreciated the fairness of the model as they voiced their concern for maintaining our roads (on which to drive their new vehicles). They agreed that motorists should fairly pay for the roads they use.

While a road charge would be a new bill for them to pay (instead of paying tax at the pump, as they did with their old car), savings in fuel consumption far outweighed the prospect of a road charge. They were just thrilled to not have to visit the pump anymore! Also, multiple incentives were known to be available for purchasing fuel-efficient vehicles, state and federal, which added up to thousands of dollars against the purchase price.

When faced with the realization that the gas tax places greater financial burden for maintaining our roads upon less affluent drivers who purchase vehicles in the secondary market (less fuel-efficient), the logic of a per-mile charge became clear. Some said, "I want to do my part."

Turns out, every driver wants good and safe roads to drive on, no matter what car they drive.

Myth: It's unfair to rural Oregonians who drive longer distances.

Fact: Every driver is different, with no significant net difference between rural and urban.

Some say it would be unfair for rural drivers to pay a road usage charge because they must drive longer distances to do basic things such as go to work, school, medical appointments and the grocery store. While this may be true for some rural drivers, nearly all Oregon motorists already pay a distance-based tax-the fuel tax.

But the fuel tax is not a perfect proxy for road use because it imposes a higher cost per mile on people who drive less fuel-efficient vehicles. Some drivers-for example, those with working vehicles such as pickup trucks-pay much more per mile than others. Someone driving a Ford F250 15,000 miles a year pays $410 in Oregon fuel taxes whereas a Toyota Prius driver pays $90 for traveling the same total distance.

Recent ODOT surveys found no consistent theme for rural driving. Rural drivers are actually quite diverse and have many travel behaviors. Some live in towns or close to them while others live far away on working properties. Some drive short distances and less than urban drivers while others drive longer distances and more than urban drivers.

Bottom line, extremely rural Oregonians reported driving much longer distances for medical appointments and shopping, but that was offset by less frequent trips than their urban counterparts. The net difference? Not much.

Myth: A government-run system is certain to be problematic and cost a lot of money.

Fact: The program uses private sector vendors to provide high performance at low cost in a competitive, open-market system.

It's true that the cost to collect Oregon fuel taxes averages about 0.5% of revenue-a real bargain! That figure reflects a fully operational, mature program with three million vehicles. And it excludes capital costs associated with establishing the system back in 1919 (Oregon was the first in the country to implement the gas tax, too.)

Operating costs for the Road Usage Charge Program will start out high but using private vendors to manage collection will reduce system costs over time. ODOT expects vendors will use the per-mile charging system as a platform for marketing other products and services, such as pay-as-you-drive insurance, tolling, and travel concierge-or perhaps those services would serve as a platform for the road charge. Many of the costs of system implementation and operation would be borne by the industry, and their customers could benefit from value-added services, discounts, and open-market innovation and upgrades.

It's worth the investment. As the number of program participants grows and the market for value-added services expands, costs will decline substantially. ODOT estimates when the number of road usage charge payers reaches one million, operating costs will drop to below five percent of gross revenues per month.

What's more, by enlisting private sector companies to provide technology and billing service options, program participants will benefit from innovation that is naturally driven by the open market (versus a "closed" system entirely run by the government).

The "connected car" is becoming reality. Many vehicles already have factory-installed telematics systems that could be used to wirelessly report miles driven. In time, motorists may be able to simply drive and receive a bill by email that is bundled with other services, such as insurance, cable, parking or mobile phone charges. They would pay online via smartphone and roll on!

Looking Ahead

Years from now, the road usage charge model could transform the way Oregon drivers pay for the roads they use every day. It offers a way to equitably assess fees based on the value a motorist gets from the public infrastructure. And because technology is advancing so quickly, the system can maintain privacy even while delivering higher levels of service and more seamless ease of use.

No solution, not even Oregon's, can address every set of circumstances. Still, Oregonians are proud to be blazing a new trail-high-tech, responsive and practical-keeping alive our tradition of innovation that stretches back to the days of sputtering Model-Ts, roads of mud, and the nation's first gasoline tax.

My commentary

Let's be clear about what Oregon is not. It is not a congestion charge and there is no sense that this will be a precursor to charging by time of day or location (although in the long term it is possible to conceive of pathways towards that). What it is doing is shifting from payment of roads through fuel tax to paying for them directly, by actual use. It demonstrates a path forward for jurisdictions that wish to transition from fuel tax (or indeed could do so with vehicle ownership/licensing taxes) to usage based charging.

Yes the Oregon scheme has a limitation, with a cap of 5,000 vehicles allowed to move onto this system. Hopefully, the politics behind this will mean that the cap can be removed in due course, and there can be some expansion of the programme further.

Washington State and California are both watching Oregon closely, and have been undertaking their own work to develop charging programmes. It is far from inconceivable that both will move forward in broadly similar ways, and if the entire Pacific seaboard of the United States is starting to charge cars by their actual use of the roads, maybe it will be time for other countries to catch up?

Thursday, 9 July 2015

Since 1936, when the previous Road Fund was wound up, the UK Treasury has been vehemently opposed to any form of tax hypothecation (dedication of revenue for one purpose). The primary argument against it is that it reduces the flexibility of government in the use of its revenue, and can result in the hypothecated fund having too much money, and so spending on that purpose ends up being wasted.

It would appear that all of that has been pushed to one side with yesterday's budget by Chancellor of the Exchequer, George Osborne, who announced three measures relevant to the charging and management of roads:

- Reform of Vehicle Excise Duty for cars (the tax on owning cars);

- Establishment of a hypothecated Roads Fund in England with the revenue generated in England from VED;

- Another year of freezing fuel duty.

No, it doesn't mean that there is any move to road pricing soon. However, the setting up of a Roads Fund in particular will establish a closer relationship between what is paid by motorists (for owning a vehicle if not using it) and what is spent on roads.

Monday, 15 June 2015

According to the Australian Financial Review, in a bold and brave step, the Australian Automobile Association (AAA) has declared that it supports a longer term shift from fuel taxes to charging road vehicles on a distance basis. This comes on the occasion of the Australian Financial Review sponsored National Infrastructure Summit held in Sydney.

The AAA has 7.5 million members and represents eight subsidiary motoring associations in Australia's six states and two territories, and is essentially a lobby group for private car owners, but it has clearly thought much deeper about the how roads are charged and paid for than many such organisations elsewhere across the world. It estimates that motoring taxes in Australia (including fuel and ownership/licensing taxes) collect around A$34 billion (US$26.2 billion) per annum, with spending on roads at around A$24.5 billion (US$18.9 billion).

At present, there is no specific move from the Australian Federal Government to implement distance charging, but the debate has certainly livened up. At present, the Federal Government is seeking to index fuel tax to inflation for the next two years, which the AAA supports as an interim measure, but AAA Chief Executive Michael Bradley wants the Government to think longer term.

Currently 47.4% of fuel tax collected in Australia is spent on roads (after rebates for major non-road users of petrol and diesel, specifically in agriculture, mining and fishing). The AAA wants this increased to 50%, but its concern over fuel tax is one of equity.

Mr Bradley said:

"Fuel taxes disproportionately affect regional and poor people. It discriminates by geography and it's a blunt instrument that does not allow for time, distance, mass and location – any of these variables – to be taken into consideration"

It's concerned that fuel taxes fall heaviest on low-income households, particularly those in regional and rural areas with few or no alternatives but to drive. Not only do those motorists face, on average, further to drive than those in cities, but are also less likely to be able to afford the newest most fuel efficient vehicles.

This begs the obvious question as to whether distance charging would exacerbate that, but the AAA wants such charges linked to providing a service, rather than being treated as just another tax. It is also supporting the use of congestion charges as part of the system, which will mean lower costs for off peak and rural driving.

The report says:

In a submission to the government's tax white paper, the AAA said roads are the only remaining major public utility not subject to usage charges that can vary by time of day, as is the case for telecommunications, gas, water, electricity and other forms of transport.

Notwithstanding that time of day charging for water is not common, this is the key point. The AAA is supporting a shift to direct charging that replaces existing taxes and the idea of a trial where users are charged by distance, and get a rebate in fuel tax when they fill their vehicles.

Federal Government has mixed views

According to the news website news.com.au, Assistant Infrastructure Minister Jamie Briggs is "interested" in the idea and seems to want further discussion of it. His chief concern is around estimates that congestion costs could rise to A$31 billion per annum by 2031, and that building new roads and public transport wont adequately address this. He said:

“In today’s world we generally accept that you pay for the service you receive. Road pricing remains the exception,”

This implies a genuine interest in a more commercial, consumer based way of charging for and managing roads. However, his more senior colleague, Deputy Prime Minister and Infrastructure Minister Warren Truss is much more sceptical claiming that distance based charging using satellites wouldn't pass the "pub test" and that the public wouldn't be ready for charging by time of day. His quote was:

"I think people still like to be able to visit their girlfriends without the whole world knowing – or their wives knowing,"

This resurrects the widely held fear that such charging would mean an end to privacy as to vehicle trips, even though it is clear that options to preserve this can be maintained. Still, when rejection is about public acceptability, it is much more intelligent than opposing it outright.

The Labor (opposition) Party's Infrastructure spokesman, Anthony Albanese said road charging would only work if "the right policies were implemented", which has to be the tautology of the National Infrastructure Summit.

Greater state and private interest

Mike Baird, Premier of New South Wales said that government had to explain the benefits of tolling, and that the state government's priority was to make the wide range of tolls on roads in Sydney more "efficient"

Whereas the Chief Executive of toll road owner, Transurban, Scott Charlton argued that fuel tax income is "drying up" claiming that replacing a 20 year old car with a new one costs the Federal Government around A$350 (US$270) per annum in revenue. He said:

"The driver of a late model fuel efficient car is paying far less in fuel excise than the driver of a less efficient car ... despite them having the exact same impact on congestion and on infrastructure"

Which is dead right, although some would argue there is benefit in lower environmental impacts, this doesn't address the infrastructure or congestion issues. Transurban is to introduce a "pilot study" in Melbourne to test the impact of three versions of road pricing on motorists' behaviour. These are:

- Price per trip/access charge;

- One off charge based on anticipated distance;

- Distance based charge.

Also included in the pilot are variations based on time of day and CBD based charging. It is unclear how this pilot will work, particularly outside its own roads, but it is clear Transurban sees a business case for supporting wider road pricing in Melbourne.

Wider issues

Charlton also indicated that mass adoption of driverless vehicles may be expected by 2030, which could change car use and reduce the incidence of second car ownership and traffic levels overall.

John Daley from the Grattan Institute (a thinktank) has claimed that Austalia has stagnant car use, with statistics from the Bureau of Transport Infrastructure and Regional Economics claiming passenger kilometres by car are stable, which suggests the assumption of continuous growth in car use may be wrong (but also that increased road capacity will necessarily induce more traffic).

In other words, assumptions about future endless growth in car traffic seem to no longer hold true, at least in the Australian context (although similar observations are being made in some other developed economies).

Studied to death

None of this should be that new, given that the Australian Productivity Commission and the Henry Tax Review have both recommended a shift away from fuel and ownership taxes to distance based charging. The problem for Australia is jurisdictional.

Fuel tax is charged at the Federal level, so moves to replace that would have to come from that level of government, although the size of the country and the complications of having States with varying degrees of interest in distance charging means that there is some reluctance at the Federal level. However, vehicle ownership/licensing/registration taxes are charged by States, which suggests moving from those taxes to distance charging could happen at the state level. Yet, it is far from clear that it would be worth it just to replace much of those taxes at the state level.

The suggestion of a pilot at the Federal level would make more sense, but what is needed is not just a strategy for charging, but what to do with the money, how charges will be set and how to transform roads into a service. If one state can work with the Federal Government, and start a pilot which addresses both fuel and ownership taxes, it would suggest that there could be some way forward. However, Australian politics typically sees different parties governing at state and federal levels.

The clear impression is that the Federal Government is waiting on a state pushing for distance charging, whereas states are more enthused about a Federal push. For now, it appears more discussion is the future, with the hope that the more it is talked about, the more work might be done to make some progress, implement a pilot, and start a transition down a path of reform that can be largely agreed upon.

That would mean:

- Option to replace most of ownership taxes with distance based charges;

- Partial rebates of fuel taxes for those paying distance charges;

- Creation of new structures to set charges, distribute revenues and for roads to be managed on a more commercial basis;

- Options to move from pilot trials to full scale charging either by geography, vehicle type or some combination of both.

Tuesday, 9 June 2015

I was invited by BBC Essex radio to be interviewed on the James Whale breakfast show this morning, specifically about the Dartford Crossing - the UK's busiest tolled crossing - because of a range of issues arising from its conversion to fully electronic free flow tolling.

Regardless, I thought it might be useful to write a number of key facts about the Dartford Crossing given the debate in the county. It is clear the toll remains highly unpopular, not least because it was original sold to road users on the basis that when the capital costs of the crossing were repaid, the toll would be removed. The first single lane each way tunnel was opened in 1963, followed by a second tunnel in 1980, which was connected to the M25 on the northern side in 1982 and southern in 1986. Subsequently, the Queen Elizabeth II Bridge was completed in 1991.

As effectively the only tolled section of London's only ring motorway - the M25 (although technically the crossing is not part of the motorway, in practice it works as part of it), it is controversial, because there are no alternative local crossings of the Thames by road for another 12-15 miles west, at the heavily congested (untolled) Blackwall Tunnels. Local cross Thames traffic must use the tolled crossing, although a discount scheme means residents of the Dartford and Thurrock Boroughs can pay £20 a year to get unlimited use of the crossings.

Dartford Crossing charges with and without an account.

Dartford Crossing facts

The Dartford Crossing raised just over £80m in gross revenue in 2013. This revenue is accounted for in Department for Transport accounts, but it not dedicated to any specific purpose. Given around £40m is spent per annum on the Crossing and its associated approach roads, it is reasonable to assume it offsets this.

The Dartford Crossing design capacity is 135,000 vehicles per day, it currently just exceeds that;

It cost £384 million to design, build and operate the free flow tolling system for the next seven years, but it did cost around £26 million per annum to operate the previous system;

£42.5m was spent on the Dartford Crossing in 2013, of which £26.7m went to Connect Plus, the British/Swedish/French consortium that holds the PFI contract for the upgrade and maintenance of the entire M25 and the Crossing. Another £15.8m was spent on capital improvements to the crossing for fire safety and for the introduction of free flow tolling;

Connect Plus subcontracts management of toll collection of the Dartford Crossing to SANEF, a French company that owns and operates many motorways in the northeast of France;

There is currently a 10% non-compliance rate, but after one year this should be expected to come down. In the first year of the London Congestion Charge, just over 5% of chargeable events were violations. Good practice at free flow tolling roads elsewhere is around 2-3% non-compliance rates;

The system of detection is purely using Automatic Number Plate Detection (ANPR) cameras, which now can achieve accuracy readings of over 90% (some of the latest systems achieve 98% accuracy), although the actual accuracy of the Dartford cameras is unreported;

According to DfT calculations, the benefit/cost ratio of converting to free flow tolls at the crossing is over 4:1. 84% of the benefits come from travel time savings;

Proposals for a new crossing range in cost from £1.2 billion to £3.4 billion, and all options include full or partial funding from tolls. At the current schedule for development, a new crossing will not be completed until 2025. A preferred option is expected to be announced later this year.

The options A and C in this map are now the ones under consideration for the new Lower Thames Crossing

London's congestion charging scheme is world famous, in the esoteric world of road pricing, because it was the first major Western city, to adopt charging of existing roads. Its success is such that it ceased to become a political issue after its implementation, (notwithstanding the poorly targeted Western extension of the original central charging zone, which was scrapped by the current Mayor Boris Johnson because of local unpopularity and modest traffic impacts).

Discussion about expanding the scheme further has been largely limited to the Green Party, which as a vocal minority has keenly supported an ambitious concept of charging cars and trucks by distance largely to penalise such traffic to reduce congestion, and to raise revenue for its own preferred projects to favour cycling and public transport. Whilst this would make a significant impact on the environmental impacts of road transport (and congestion), it would appear to reflect more of an ideological opposition to motorised road transport that involves private cars or lorries, rather than an interest in optimising the use of the network or an efficient level of pricing.

Yet the merits of road pricing are widely acknowledged not only by some environmentalists and opponents of growth in motorised road transport on the political left, but also laissez-faire free-market proponents who are more neutral about growth in road transport on the political right, who believe in more efficient allocation of road space.

representing the capital’s biggest employers in financial services, property, transport, hospitality and retail, along with its universities. Its stated aim is “to make London the best city in the world in which to do business.”

The article cuts across a number of major issues for London, such as housing and governance, but transport is always a big issue.

Baroness Valentine proposes a radical expansion:

“You need pan-London road pricing,” she says. “Probably not right out to the M25, but to the north and south circular. The population’s growing, the roads are never going to keep up with the natural growth in demand, so you’ve got to ration it in some way. I would do more sophisticated road pricing than we have at present more widely. You’ll get a version of it with the new river crossings, if those are ever built.” Again, she thinks the sums would soon add up: “If you relieve congestion in London, that produces economic benefits and the Treasury benefits too.” How could you expand pricing to the A406/A205?

There could be a few different ways of doing this. The existing zone is relatively tiny in the context of greater London, as seen below

Existing London congestion charge zone

Expanding out to the North Circular (A406) and South Circular (A205) roads would be a significant expansion of the charged area, as can be seen below.

London congestion charge if expanded to the "circular" roads.

The most economically efficient way of doing this would be with distance based charging, that had a time and location element to it, but to do this would require the use of either dedicated on board equipment or the realisation of the concept of using a mobile phone app, securely linked to the vehicle, to enable such charging. The potential to cleverly target congestion, discouraging "rat running" on local roads and maximising utilisation of the network is considerable.

The bigger problem is dealing with occasional drivers into the zone. Having a single flat charge, as exists with the current congestion charge, to be effective would need to be high, and so excessively blunt for those crossing the outer cordon (or taking a single trip within the area). An alternative would be to adopt an Italian style multiple zone scheme, splitting the area within the ring roads into multiple cordons, so that motorists pay to cross multiple zones. Of course, any multiple zone system creates distortions at the boundaries of zones, so design would have to be careful to minimise these.

However, any options to create a new congestion charge based on existing ring roads have their own difficulties, because in all cases they involve compromises.

The first point to note is that at the eastern end, the two roads don't meet up over the Thames, but are connected by a free car ferry which is wholly unsatisfactory as a major arterial crossing in a major city. However, one option could be to adapt the route to be bounded by the A12/Blackwall Tunnel or to build the proposed Thamesmead Crossing to bridge the gap. Another point is that parts of the North Circular and all of the South Circular roads are far from being dual-carriageway grade separated main highway standard, but are actually residential streets in many cases indistinguishable from neighbouring ones. Quite simply, if these roads are meant to carry traffic around a charging zone they are severely inadequate in some locations, as can be seen below. The blue lines are where the roads are 2 or 3 lanes each way, grade separated, the red lines are where the roads are either not grade separated (and have significant bottlenecks) and between 1 and 3 lanes each way. Note also the gap to the east.

Gaps in London North and South Circular roads

A simple approach would be to create a second charging zone outside the existing one, but that would only penalise movements from outside the zone to inside it, not around it. Of course the lack of any real differences between outside and inside the boundary in some locations would make such a charge quite arbitrary. Look here at the suburban commercial district Forest Hill, which would be divided by a road that is indistinguishable.

Forest Hill, red line is the south circular road

Assuming that the billions of pounds needed to build serious orbital highways to fix this aren't going to come soon, if at all (given it would involve heroic levels of tunnelling), then it is difficult to envisage a congestion charge being introduced to the South Circular road without it causing serious disruption along that route.

Vignettes?
None of this is a reason not to consider various options, one floated is a "vignette" whereby motorists from outside London pay to cross the greater London boundary (which could mean most journeys within the M25 ring motorway), although the congestion reduction impact would not be significant beyond that point. However, once again, it could be a start, charging both to use a vehicle within London and for entering London, although what is the value gained from such a blunt move?

Better deal for motorists?

What will be essential is to link any charge to delivering a better standard of service to motorists in London. A lot of money is being spent on upgrading intersections in London, by and large to accommodate cyclists. For safety reasons (and because of significant increases in cycling at peak times), some of these projects are justified, but in some cases they are increasing motorised traffic congestion.

Jo Valentine is a cyclist, but says that the current programme to reallocate road space on many routes to dedicated (and in some cases segregated) cycling lanes also imposes costs on other road traffic, in the form of congestion. From 1996 to 2009, central London has seen approximately 25% of its road network capacity transferred to walkways, cycleways, bus lanes or public space (Source: Travel in London Report 4, 2011, Transport for London, Figure 4.12), although over than time demand for that road space has declined by about 12% (in significant part because of the congestion charge) (Source: Travel in London Report 4, 2011, Transport for London, Figure 4.13). In effect, it means the congestion charge has meant reallocation of road space has been more tolerable than it would have been otherwise.

I couldn't source readily the most up to date data on central London traffic figures, but extrapolating from 2007 data which indicated that 42% of motorised vehicle trips are chargeable, it appears that around 21% of vehicle trips into central London are by cars that are not exempt or 100% discounted from the congestion charge (because of disability or being ultra low emission vehicles). So the scope for modal shift in central London appears to be low. This is hardly surprising, as driving in central London is notably slower than using the Underground or cycling until after around 10pm and before 6am.

So if there are going to be more charges for motorised road users, there needs to be a consideration of using much of the new revenue either to offset other charges or to improve roads, either by addressing bottlenecks (the Bounds Green bottleneck on the A406 seems obvious), or by more tunnelled highways to take traffic away from pedestrians, cyclists and town centres.

The potential is there for traffic congestion to be significantly improved in London through charging, but the quid pro quo needs to be for the revenue from charging to be recycled either by reducing other taxes (e.g. the council tax contribution to road maintenance) or addressing the major shortfalls in the network. The Greens understandably want to use congestion charging in London as a stick to relentlessly contain road traffic, but I believe most of their objectives can be achieved by taking a more consumer led approach.

Tuesday, 26 May 2015

An excellent article in Slate describes the long term trend in the use of transport fuels in the United States:

According to the EIA, the U.S. transport system required about 6 percent fewer BTUs of energy to function in 2014 than it did in 2007. And it used nearly 10 percent less oil than it did that year. In fact, oil consumption was lower in 2014 than it was in 2000. And as a proportion of transportation fuel, petroleum hasn’t been this low since 1954, when coal was still a significant transportation fuel. Petroleum’s market share has fallen from 96.5 percent in 2004 to 91.5 percent in 2014.

US transport sector energy consumption by fuel (Source: Slate)

So in proportionate AND absolute terms, there is less oil being used for transport in the US. This is not because there is less tonnage being shipped (quite the opposite) or fewer people travelling, no it is because of fuel efficiency and the emergence of alternative fuels and motive power for road vehicles. Given that in 1954 the reason petroleum was a lower proportion was because railroads still used coal for steam locomotives (they virtually all use diesel now), the transformation today is considerable.

4.7% of consumption is now alternative fuels including ethanol and biodiesel, 3.5% is now natural gas. In 7.5 years the average fuel consumption of cars sold in the US has improved by 25%.

Although oil prices have dropped, there is little indication that this trend is about to be reversed, which poses an obvious question. What is the future of fuel tax (or "gas tax" in the US)?

In the United States and a few other countries, fuel taxation is a direct source of revenue that is dedicated to government spending on roads and public transport subsidies. However, in many other countries it is simply another form of taxation, although it tends to be acknowledged as a way of charging bluntly for the negative externalities generated by burning petroleum products.

Of course, lower consumption does mean some obvious benefits, from lower noxious emissions and contributions to CO2 emissions. These benefits can be monetised, and there is an argument for maintaining this momentum, but it is unlikely that fuel taxes are the key driver for this, not least because they are so low in the United States compared to other markets (in some cases less than a tenth of the taxes in Europe).

The growth of alternative fuels and greater fuel efficiency creates the obvious issue that revenue per vehicle mile is dropping, so what should be the response to this? There are three broad paths that jurisdictions can go down:

1. Do nothing: This is, in effect, the default position of the US Federal Government, but also all those jurisdictions that do not increase such taxes. The implication of this is that either funding for roads gets subsidised from non-usage based taxes (which is what the US Federal Government does), or funding gets cut, or those dependent on funding find alternatives (which in a federal-state relationship can mean greater use of tolls). As easy as this option is, it lacks any strategic focus and is essentially an adhoc approach to charging road vehicles and raising revenue for highway infrastructure. The mere fact that this has been the primary approach of most US state governments, as well as Federal, is a damning indictment on the political process to think strategically about the highway sector. In Europe, given such revenues are rarely even partially dedicated to transport spending, it may be easier, although this simply means as a source of revenue, fuel taxes diminish over time. It doesn't necessarily mean transport funding has to, but it does beg the long term question about reform of taxation.

2. Increase fuel taxes: By increase, I mean go beyond inflation (which a few jurisdictions already so, such as New Zealand), and increase to take into account the real loss of revenue due to efficiency. This may have some initial appeal, as it is likely to encourage a more rapid shift to alternative fuels and more fuel efficient vehicles. Yet the distributional impact of this is going to be more mixed. It will impact those who are least able to afford new vehicles the most, and also those with fewer alternatives in terms of mode or trip consolidation (e.g. rural motorists). On the other hand, it also means those driving alternatively fueled vehicles or highly fuel efficient vehicles are paying much less to use the roads, so the vague relationship between what is paid and the costs imposed upon the highway system (or capital consumed in using roads) reduces even further.

Of course, in many jurisdictions fuel tax isn't even nominally intended to be a way of recovering the infrastructure, let alone external costs, of highway use, although the economic case for doing so is clear. When there are clear policy goals to avoid subsidising overuse of highway networks (because of congestion, pollution and lack of public funding for maintenance, renewals and network enhancements), it seems obvious that moving towards a user pays approach makes sense. Fuel taxes may be a first, blunt, but low administrative cost way of doing this. Yet, if the relationship between fuel consumption and road use widens more and more across the vehicle fleet, it simply means that some road users are paying much more than others, going above and beyond the pollution costs that may be fair to recover from those users. Even if there were a hypothetical solar powered car, it consumes road space and road capital tied up in the infrastructure. It should pay for using that infrastructure, even if the case to charge it for negative externalities is zero.

So, whilst increasing fuel taxes may be a short term palliative, it feeds the cycle of ever decreasing consumption of petroleum and inequities between those who pay more through such taxes, and those who avoid such taxes because they can afford to buy more fuel efficient vehicles.

3. Implement road usage charging: In my view, the only solid case for fuel tax is as a carbon tax. If it were set at an appropriate price to reflect this, it would easily be the most defensible way of recovering that cost. It is, not, a good way of recovering the imputed costs of noxious pollution, because it isn't a tax on particulates or NOx or other emissions (as diesel vehicles emit more of these by-products that petrol vehicles, but emit less CO2 and use less fuel). Beyond that, it has long been established that the relationship between fuel consumption and infrastucture costs is very weak. One reason being that the greater stresses imposed on road infrastructure due to heavier vehicles is not reflected in proportionately higher fuel consumption to recover such costs. Furthermore, it is clear that there is no relationship at all between the long run amortised capital costs of roads and the consumption of fuel of vehicles as they use them.

However, it is not the argument that charging vehicles through fuel taxes is inefficient and badly targeted that is driving investigation of options for distance based road usage charging in the USA, but rather concern about the sustainability and equity of continuing to do so. Oregon is already well on the way to implementing such a system for the most fuel efficient cars, as an option. and other states are investigating how to move in that direction. What it raises are a whole host of questions, not least how to transition from the current taxation of fuel to charging by road usage, and also whether there is a role for continuing to tax fuel (if only because of the environmental externalities).

Conclusions

Many of the problems of highway management and infrastructure in the US today are due to a lack of funding, but also poor pricing and recovery of the costs of maintaining such infrastructure. Looking at charging directly for use, rather than through the proxy of fuel taxes would help answer one element of this, and opens up wider questions of thinking of the links between using roads, paying for roads, spending money on roads and their management. It isn't just an issue for the US, but in all jurisdictions where fuel taxes are a significant contribution to public funds.

Doing nothing may remain the easy option, particularly if the politics of raising fuel taxes are difficult, (and the politics of considering direct charging even more so), but what it ought to do is open up a dialogue and discussion about what roads are for, who should pay for them, how funding for them should be allocated, and where policy on highways should be heading. I advocate an approach that more closely linked road users to decisions on funding, and how and by how much they are charged, because doing so has delivered greater benefits in other economic sectors. It requires some strategic thinking that goes beyond how vehicles are taxed.

Thursday, 14 May 2015

The Surrey Leader reports on a telephone town hall on the referendum for a proposed regional sales tax to pay for public transport improvements. It reported on opposition to paying more, although a dial in poll indicated an almost even divide between confirmed opposition, and confirmed or indicative support for the sales tax. However, one comment took my interest was the claim by Vancouver Board of Trade CEO Iain Black who is reported as saying that road pricing is proposed for the region and could reform the toll structure but said it isn't likely to come for 10 to 15 years.

Let's be clear, Vancouver could have road pricing in three years if it wanted to do so. It could charge by a combination of distance, time and geography, with a back up of day passes for entry, if it wanted to. It could combine this with reforming tolls on the Port Mann Bridge. The issue is that the politics are seen to be too complicated. It should be clear that the option of road pricing in Vancouver remains, but is not proceeding for political reasons, not technical reasons. After all, Jakarta, Indonesia can roll out a pilot system in less than three years, Vancouver could certainly do the same.

Wednesday, 13 May 2015

Hong Kong newspaper The Standard reports that the Hong Kong Transport Secretary, Anthony Cheung Bing-leung, has announced that there is to be public consultation on the introduction of an electronic road pricing scheme on Hong Kong Island to combat congestion.

The reason for doing so is concern that the public "does not have a clear understanding" of the "proposed scheme", despite it being clear from past studies that there could be considerable merits from introducing congestion pricing for the city.

- Vehicle rationing systems such as applies in Beijing (odd number/even number permits to use roads on certain days);

- Increasing fuel tax;

- Promoting car-pooling/sharing for cross-harbour tunnels;

- Contracting enforcement of traffic offences to the private sector.

There is little explanation as to why increasing fuel tax and encouraging car-pooling were rejected, except that the former has a blunt impact that affects the whole region, and isn't particular effective at targeting congestion, and that the latter is not expected to have much impact. However, it is considered that once concessions expire for two of the tolled cross harbour tunnels, tolling may be varied between them to help manage demand across the three tunnels (the central one is typically the most congested).

The proposed zone for introduction of a scheme is similar to one investigated in the past, and comprises the area known as Central and Wan Chai, which will be bypassed by a new highway currently under construction.

Possible Hong Kong congestion charge zone

It is not clear what a pilot would look like. I'd say that some sort of trialling of variable peak tolls on the harbour tunnels would actually be a low-risk obvious start, although it would cost money to compensate and negotiate with the concessionaires that own the Western and Eastern crossings. However, the concession on the Eastern Harbour Crossing purportedly ends in 2016 (although the Western Harbour Crossing concession continues to 2023), so there may be some scope to vary tolls to increase utilisation of the Eastern Crossing compared to the Cross Harbour Tunnel. However, such variations are likely to have to await completion of the Central-Wan Chai Bypass which can more readily distribute traffic on the island side.

Beyond the crossings, a pilot could operate in a small sub-set of central Hong Kong at peak times only, and would be easy to trial.

Of course, Hong Kong has a history in studying this, having launched trials with GPS technology on vehicles at the closed Kai Tak Airport site over 17 years ago. It would be a great leap forward for Hong Kong to finally move from that to a pilot. I can only hope that the consultation and information provided in Hong Kong to the public can be positive, and perhaps it needs to answer one of the biggest questions asked when pricing is offered to the public - what is the money going to be used for?

The answer to that question is far from clear, but perhap therein, lies the scope for more work to be done and for options to be presented to motorists.

Friday, 24 April 2015

Norway has started a review of motoring taxation and its support for subsidies for electric vehicles according to Reuters.

It had a target of having 50,000 electric vehicles registered in the country, and has reached that level, with a wide range of incentives including:
- Toll free use of roads;
- Zero charges for public car parks;
- Access to bus lanes;
- Free use of car ferries;
- Free use of public vehicle charge points.

Norway is well known as a major oil producer, but it is also geographically blessed with considerable hydro-electricity, which supplies nearly 99% of its electricity, so it can export the oil and use its own electricity from a source than is a very conventional renewable one (so there are no issues around the use of electricity increasing emissions).

20% of all vehicles sold last year were electric, with Norway alone representing one third of all such vehicles sold in Europe (Norway notably is outside the European Union, but has free trade with the EU through the European Free Trade Agreement). According to InAutoNews, the subsidy scheme meant that purchasers of the Tesla Model S, a luxury sedan, were getting subsidised.

The subsidy scheme is one thing. I tend to think that policymakers need to be very careful not to make programmes to encourage purchases of electric vehicles subsidies to relatively well off individuals and businesses. There is a case for taking into account the relatively lower environmental impact, but there is little evidence that most such schemes do that.

However, there is little indication of what is behind the review of fuel tax and other motoring taxes.

It's worth remembering that Norway has many toll roads, not just the relatively well known Oslo toll ring (which effectively operates as a congestion charging cordon), but on major highways across the country, with 40 currently listed (full list here). I addition, it recently became compulsory for almost all heavy vehicles (those over 3.5 tonnes) to have a toll tag account.

Map of Norwegian toll roads from Norwegian Public Roads Administration

So tolls are a well established way of paying for major new highway infrastructure in Norway. However, fuel tax is important as well. Fuel tax is US$3.87 per gallon (US$1.02 per litre) including a tax on CO2. However, with such significant increases in the electric fleet, revenue from such tax will be dropping significantly. Will Norway increase such taxes further (which is likely to particularly harm larger commercial vehicles with fewer viable options to switch to electric vehicles), or replace it with more tolls or a distance based charge?

I suspect the subsidy programme for electric vehicles will be significantly scaled back, bearing in mind Norway is significantly affected by the recent drop in oil prices, affecting state revenues.

However, the future of fuel tax will be more interesting. Bear in mind that its neighbour Sweden has an influence, as having taxation significantly lower than Sweden will encourage some informal and illegal trade across the border (which itself has low levels of control because both countries have signed up to the Schengen Agreement). So there may be limits as to what can be done quickly. However, with a culture used to tolling, is it too much to think that maybe Norway will be the first country in Europe to start a transition away from fuel tax and towards network wide road charging?

Wednesday, 25 February 2015

Typically, narratives around government policies in China are dominated by the false belief that if a Chinese Government body says something is going to happen, then nothing can be done about it. The truth is much more subtle, and besides indicating - in this case - that congestion charging needs to be considered carefully if it is to get public support - it also indicates that China has moved from the stereotype of the Maoist single-minded unity, to one where there is public discourse about policy.

The (Hong Kong based and owned) South China Morning Post reports on a delegate from the Beijing Municipal Commission of Transport saying that congestion charging was being considered for city. However, the public response on weibo (Chinese equivalent of Twitter) was mostly negative.

The report says:Opinions posted on weibo accounts were almost one-sidedly negative, with some accusing the government of being "lazy", "brutal" and "greedy".

Nie Sheng, a resident of Daxing who drives to work in Haidian, said a congestion charge would not solve Beijing's traffic jams, judging by past experience.

"In recent years, the government has restricted sales of cars, raised parking fees in the city centre and banned non-local vehicles from the city, but the traffic has only got worse," he said.

Nie also worried that the charge would penalise low income and middle class drivers while sparing the rich and powerful, who could either afford the charge or used government cars.

It shows that if a charge is to be introduced, it needs to be part of a strategy that complements it, not just a tax. One comment from a government body expresses concern that a congestion charge could affect retail sales, but professor of urban traffic management at Beijing Jiaotong Univeristy, Chen Xumei says one reason why so many use cars is the attitude to public transport:Most people drive because they feel no dignity on public transport, which is inconvenient, congested, uncomfortable and dirty," she said. "The money collected from the congestion charge should be used to improve public transport"

Indeed, a package to make public transport more user friendly and able to meet a wider range of demand would also make a difference.

Thursday, 19 February 2015

Congestion pricing in Hong Kong seems like a no-brainer, and the authorities in Hong Kong, both before and since the "hand-over" back to China, have acknowledged this formally and informally. Both the north side of Hong Kong Island and Kowloon (the parts of Hong Kong that weren't formally part of the lease from China, but were acquired by the UK effectively through conquest) have such high-densities of people (and public transport usage) that pricing those roads would appear to deliver enormous benefits from reduced congestion and pollution, with alternatives (certainly for people movement) obvious. The added benefit in Hong Kong is that most public transport does not require subsidy, as the network of bus and mini-bus services operates commercially, all with integrated smartcard ticketing, so growth in demand is met by operators investing themselves. Even the metro system pays for itself, and there has been ongoing investment to expand it, supported by revenue from the property development at station sites.

Options for road pricing in Hong Kong were comprehensively considered in the late 1990s, to the point that the closed Kai Tak Airport site was used for technology trials including GPS for distance, time and location based road pricing. Options were revisited twice since then, but on both occasions the Hong Kong Government has rejected the idea for political reasons. New roads and metro lines have continued to be built, but a report in December 2014 from the Transport Advisory Committee recommends that road pricing be looked at again.

The full report is available here (PDF) and states that average road traffic speeds have fallen by 11% in 10 years and air quality has worsened, which is partly attributable to congestion.

The report concluded that traffic congestion has five recurrent causes in Hong Kong:

- Physical and spatial constraints to expanding road infrastructure make it impossible to add capacity to meet demand, with scope for additional capacity becoming severely limited (expecting around 0.4% per annum expansion in road length by 2020);

- Size of the vehicle fleet continues to grow, at a rate of around 3.4% per annum in recent years;

- Competing use of road space generates network delays, such as the loading/unloading of trucks, pick up/set down of buses, taxis and cars, and vehicles circulating for kerbside parking. All of these activities interfere with smooth traffic flow;

- Road works, whether to maintain the highway or in relation to infrastructure underneath the highway.

Measures proposed to address it run across the whole range of road pricing measures, including ownership taxes, fuel tax, parking charges and road pricing itself:

- Increase the First Registration Tax (for all newly registered vehicles) and Annual Licence Fee, including for "Environmentally Friendly Petrol Private Cars"(which have a concession) to reduce the growth in vehicle ownership.

- Tighten up the category for "Environmentally Friendly Petrol Private Cars" reflecting that they still contribute to congestion (this can be done by continually lifting the standard to reflect the latest technology);

- Fuel tax on diesel should be reintroduced, as diesel is tax free, but petrol taxed at HK$6.06 per litre (US$0.78 per litre). This incentivises a shift to diesel, which should be removed.

- Increased parking meter charges (as these have not increased in 20 years, but inflation in that time would have added 40% to them) as they are significantly underpriced compared to commercial parking facilities, and encourage circulation of vehicles seeking for parks.

- Central District of Hong Kong should be a pilot site for a congestion charge pilot scheme, following completion of the Central-Wan Chai Bypass, with early public engagement on how it should be implemented.

Wednesday, 18 February 2015

As has been discussed previously on here, Indonesia's capital has been looking at replicating the success of its neighbour, Singapore, in introducing urban road pricing, even using the same terminology - Electronic Road Pricing (ERP). It has been getting serious consideration for over four years now, but has been subject to some delays in part because the aspiration and ambitions for road pricing were clearly too big, especially given the timescales proposed for introduction.

Jakarta itself has an enormous congestion problem, with a population approaching 10 million, it has suffered from poor public transport and rapid economic and population growth. Jakarta is probably the largest city by population with no urban metro rail system (although it does have a commuter rail system, it largely uses secondhand rolling stock from Japan, and carries around 700,000 passengers per day).

The Jakarta Post now reports that tenders will be called to supply an electronic road pricing system (just like Singapore called the ERP), with the hope being that it can be in operation before the end of 2015 at pilot sites.

The city has already involved Kapsch and Q-Free in technical trials since 2014. The proposed pilot charge will be applied to two corridors. I've indicated these out below, both appear to just cross the inner ring tollway.

Jakarta ERP pilot corridors

However, these are only short corridors in the context of greater Jakarta as can be seen below, so it really is a pilot:

Greater Jakarta with proposed pilot congestion priced roads in blue

The law passed two years ago to support the introduction envisaged a first stage that was somewhat larger:

Proposed first full stage of Jakarta congestion pricing

This would focus on one of the busiest corridors into central Jakarta and some parallel routes. The system is intended to replace the "three-in-one" effective HOV requirement for such roads, which means that at peak times it is compulsory for cars on those roads to have a minimum of three occupants. That will increase the flexibility in using the roads, but should also better target compliance based on payment. It also will avoid the current abuse of the HOV system whereby entrepreneurial "jockeys" charge motorists Rp 25,000 (US$1.95) to Rp 30,000 (US$2.34) to make up the number in their cars (even when roads aren't market oriented, market solutions to individual problems appear).

Successful technology trials to expand

Technology trials using conventional DSRC technology have been successful, with 95-98% accuracy reported, although given DSRC ought to achieve 99% it is unclear why it should be so low. The claim is that with very heavy congestion, number plates are not always detected, although it should not be a problem for virtually all DSRC vehicle tags to be detected. One of the key issues for Indonesian number plates is the lack of a standard typeface or "font" used for the numbers and letters. This is a classic example of one of the enabling issues that I've referred to before that needs resolution before such systems can be introduced.

Up to 50 vehicles were installed with equipment from Kapsch, Q-Free and Watch Data for a technology trial last year. The trial will relaunch on the pilot routes in March 2015 with equipment from only Kapsch and Q-Free according to the Jakarta Post report. Kapsch and Q-Free are widely known in the tolling industry, both being well known and established suppliers of electronic free-flow tolling systems using DSRC technology.

This report from ITS International also indicates that the trial included a system from Q Free that is more sophisticated than the standard DSRC tag and beacon operation familiar in many other countries, but involved deduction of credits from a prepaid smartcard. This parallels the Singapore ERP system, which enables motorists to pay anonymously, as long as the smartcard in the onboard unit has sufficient credit to cover the toll.

Strategy to use surplus revenue to expand public transport

A separate management unit within the Jakarta Transportation Agency has been created to manage the revenues. I would hope that it spends considerable time development the enforcement and compliance system, which can be the weakness for any such system.

Net road pricing revenue will be used to increase public transport services, which in Jakarta suffer from the lack of any underground metro (although one is now under construction), and so is focused on bus services and a series of commuter rail lines.

It's notable that the Jakarta Post report includes comments from various freight haulage and courier business representatives which oppose ERP, because they can only see the cost involved. However, this is where some effort needs to be put into ensuring the pricing and implementation actually deliver improvements to travel times, and so significant savings for road users.

There is clearly potential for Jakarta to have a network of priced roads, combining both the existing toll road network (which includes manual toll booths) and charging existing roads, but to make it successful it will need to be careful in setting prices and how it uses the net revenues. I'd suggest that some of the latter should be put into targeted congestion relief projects whether it involves roads, public transport or even improving the environment for pedestrians and cycling traffic.

What's next?

Further trials, but a tender will be developed for implementation of an actual pilot that will involve users having to pay to use at least part of the roads I have highlighted above. In due course it may expand step-by-step, like the Singapore system, but first it has to be piloted with real users, to see what the reaction is and to prove it can be successful. I can only hope that Jakarta gets the pricing right, the products right, the network planning right and the compliance/enforcement right to prove the concept in practice. Introduction by January 2015 may yet be too ambitious.

Earlier proposals for a network of charged roads in Jakarta

Footnote: Curiously, one measure that will have a long term impact on congestion is that Indonesia abolished virtually all subsidies on fuel on 1 January 2015, taking advantage of rapidly declining oil prices (Indonesia, once a major oil exporter is now an importer). The drop in prices has meant that even after the abolition of subsidies, retail prices remain lower in January than they were in December. As prices rise over time, then growth in traffic can at least reflect market prices for fuel.

Tuesday, 17 February 2015

An interesting, but lengthy article by Carlin Carr on a Scroll.In website puts forward the case for how cities can avoid being heavily congested by cars, and makes some valid points.

For Japan, yes here is a country with dense rail transport, albeit much in dense cities where such rail is profitable. This has meant that rail travel is very normal for residents in major cities and between cities, bearing in mind distances between many of the major cities are not large, lending themselves well to fast rail travel.

What missing about the analysis around Japan is two key factors. The ruling Liberal Democratic Party (which literally monopolised government in Japan until the 1990s) has always been closely aligned to the construction industry, which was largely relaxed as to whether vast amounts of money were poured in roads, railways or airports. In truth, Japan has overbuilt much of its infrastructure, with there being more than enough road and railway capacity outside metropolitan areas. While the original Shinkansen lines have demonstrated positive economic results, more recent lines have not, as they simply reflect a belief that building infrastructure is good in itself. It isn't, and Japan is, in part, paying for this now, with public debt in excess of 200% of GDP, and a stagnant economy. It's worth noting Japan's railway system is privatised, and has always has an element of competition even before that. The second point is alluded to in that all major national highways are tolled, and urban routes may also be tolled, but the national highway network is Japan is privately owned (under a PPP lease). As such, the roads are managed commercially and tolls set to recover maintenance costs and the cost of the lease of the assets, so tolls have to cover costs and generate a return. Yes the shaken (regular safety inspection and tax) does incentivise lower levels of car ownership, but it also incentivises rapid turnover of the fleet, with old vehicles not remaining in the fleet in large numbers because of the costs of them meeting safety and emissions standards.

Singapore remains the world's most sophisticated example of urban road pricing. No other city charges by route, direction of travel and time of day with differential pricing based on congestion, and it works very well. Yet many will point out that Singapore has specific characteristics that make it special. One is that housing density is high, as a city-state, it is easy to develop the densities of travel that make public transport viable. Singapore's metro, for example, does not require subsidies for operation and renewals. Secondly, is that Singapore has a combination of a highly credible judicial system and public bodies for enforcement, and a culture of compliance that means it is easier to implement such a radical solution in the city-state.

As far as solutions are concerned, there is plenty of merit in developing cities in countries like China and India providing heavily for pedestrians and cyclists, so that these options for short trips remain preferred, and then to focus on enforcing parking laws and in rationing parking by price. Beyond that, regardless of whatever planning options are chosen, the future for rationing road space belongs to road pricing.

Of course, to do that requires some key elements to be in place, which includes the ability to robustly track down violators and to enforce violations meaningfully, which isn't always possible in countries where number plates and databases of owner records are haphazard.

However, my main point is that it shouldn't be seen as a "war" on cars. Cars have a role in cities, it is just about how cities ration precious road space so they pay for it appropriately. Of course not everyone can use their car at the same time, it's not physically possible and when they try, it creates negative externalities for others.

Rationing road space rationally!

Yet, if you pay to park and pay to use the roads, at a price that ensures an efficient flow of traffic, then it should be fine to use your car. Disabled motorists might be given preferences or discounts to recognise that alternatives for them may not be viable, but overall the roads can be managed so that, like other scarce resources, their use gets rationed by price.

The first step to doing this is to ration road use by basic enforcement of requirements around safety - that drivers have licences, that vehicles are safe to be on the roads, and for regular violators of safety related laws to lose licences. It requires that parking laws be enforced where they interfere with road safety and capacity, but after that a rational approach to rationing road space used for parking and loading should be considered. Charging for access, time limiting access for loading, setting aside spots for disabled vehicles and bus stops, all of these sound basic to those with well developed highway rules, but need to be the first approach for many developing countries.

Intelligent technology makes dynamic parking charges all the more possible, and from then we go to pricing. Whether it be tight city centres, or major new capacity, or charging cordons, zones or by distance, it can be introduced in steps, and what it is about, is not just thinking about mode choice but route choice and time of day choice,

No planner can second guess the best option for anyone on a particular trip whether it be for themselves, family or for goods, but by pricing roads and parking rationally, these choices can appear, and can come from either using roads differently, or using other modes.

It's not about a war, it's about applying a rational approach to rationing a scarce economic resource,

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What is road pricing?

Road pricing is any system that directly charges motorists for the use of a road or network of roads. Traditionally it has meant tolls on single routes, particularly crossings such as bridges or tunnels. More recently it also includes area, cordon and zone pricing of urban areas, and distance and time based charging of whole networks. It does not include fuel or tyre taxes, or taxes on ownership or purchase of road vehicles.